Credit Suisse: The Next Lehman?

Over the next few days, you’re going to be hearing a great deal about Credit Suisse and their various financial troubles. On Friday last, the credit default swaps on debt that they own (insurance policies) began to rise. When people are calling in their insurance, it means the underlying debt that was insured has defaulted. This has led to bank executives to make calls reassuring markets and investors. However, for those of us who lived through 2008 and have learned from it, it all seems a little too close to home. An investment bank has bad debt, they claim to be fixing the problem, and then the whole operation goes under taking the global economy with it. Bear in mind, Credit Suisse is the premier bank in the world. Everyone is exposed to them and their potential for contagion. They are the very definition of Too Big to Fail and yet, here we are looking at how to stop them from failing. In this video from the summer, Financial Times talks about the early days of this crisis and scandal and how one of the world’s best banks became a teetering giant.